CEO Patricia Russo, under pressure to produce better returns, called the latest results unsatisfactory. She said the French-American manufacturer's chief financial officer will soon step down.
The job cuts are in addition to the 12,500 announced in February and will help save an additional 400 million euros ($578 million) by 2009, the company said. Together, the cuts amount to 20 percent of the 82,500 work force employed by Alcatel and Lucent when they combined. The company has shed 5,000 workers this year.
Three profit warnings this year have put pressure on Russo, who took over after France's Alcatel SA acquired Lucent Technologies last November.
Russo denied reports that she had been given an ultimatum by the board, saying it is "fully supportive" of her plans to expand the current three-year, 1.7 billion euro ($2.45 billion) cost-cutting program.
She also announced that Chief Financial Officer Jean-Pascal Beaufret will be stepping down in the "next weeks." He will be replaced by Hubert De Pesquidoux.
Russo's new "three-point action plan" will streamline the core carrier business, create a more "offensive market strategy" by focusing on higher-margin businesses, and simplify management, she said. A seven-person management committee is being charged with implementing the plans.
"Volumes we are seeing are not what we expected. These are difficult but necessary decisions, and we will manage these reductions with care." Russo said she would not "at the moment" specify where the job cuts would take place.
The announcement came as Alcatel-Lucent reported a third-quarter net loss of 258 million euros ($373 million), compared with a pro forma profit of 532 million euros in the same period a year ago. The loss is slightly larger than analyst's expectations.
Unions in France were pressing ahead with a one-hour strike Wednesday, which had already been announced Monday in anticipation of bigger cutbacks.
Russo announced the new round of job cuts after saying earnings were "still not at a level that we are satisfied with."
Alcatel-Lucent already said Sept. 13 that third-quarter operating profit would be "around break-even." In the fourth quarter, Alcatel-Lucent said it expects a "solid ramp-up in revenue." For the full year, revenues are likely to be nearly flat, the company said, admitting that the result is at "the low end of the range previously provided."
Alcatel-Lucent is not alone in downgrading its earning forecasts. In announcements over the past two weeks, Swedish wireless equipment maker LM Ericsson AB posted a 36 percent drop in third-quarter earnings and stunned the market with a hefty profit warning. Ericsson blamed a decline in high earnings activities, such as mobile-network upgrades and expansions.
Nokia Siemens Networks, the troubled networks division set up by Nokia and Siemens, had an operating loss of 120 million euros ($170 million) in the third quarter on sales growth of 7 percent.
Alcatel-Lucent's share price has dropped over 39 percent so far this year, as the profit warnings scared off investors.